Grievance arose regarding proper incremental pay increases for employees
Ontario’s Divisional Court has dismissed Canada Post Corporation’s (CPC) application for a judicial review of an arbitral award arising from a grievance regarding the compensation of employees ‘acting’ in higher classification positions, instead of being appointed to those positions.
In Canada Post Corporation v. Canadian Postmasters and Assistants Association, 2025 ONSC 6469, the Canadian Postmasters and Assistants Association brought the grievance in 2016 regarding the appropriate incremental pay increases for these types of employees.
The union alleged that employees acting in postmaster or senior assistant positions did not receive the proper pay increments ‘as if appointed’ to those positions. Denying the grievance, CPC argued that it appropriately calculated compensation.
In 2021, the arbitrator issued an arbitration award determining the proper pay under the collective agreement. CPC started paying employees in line with this award.
Given that CPC had underpaid and overpaid some union members under its previous interpretation, the parties addressed the underpayment of some members. However, they disagreed regarding the appropriate approach to overpayment, which prompted the union to file another grievance.
On Dec. 7, 2024, the arbitrator issued the second arbitration award. CPC applied for a judicial review of the second award. CPC asserted that the award unreasonably denied it the right to recover overpayments it had made to employees due to a mistake of fact.
Award upheld
The Ontario Divisional Court dismissed the application and ordered CPC to pay the union’s all-inclusive costs of $5,000, as agreed upon.
The court ruled that the arbitration award was reasonable and showed the hallmarks of justification, transparency, and intelligibility. The court added that the award fell squarely within the arbitrator’s special expertise.
First, the court held that the arbitrator considered the collective agreement when making the award. Second, the court determined that the lack of a formal and detailed analysis of the components of estoppel did not make the award unreasonable.
The court explained that the award covered the criteria for estoppel, given that:
- CPC overpaid employees over a long period of time
- The impacted employees were not responsible for the error
- CPC did not notify the employees of the risk of overpayment and recovery
- There was a recognition that hardship would result if someone believed their income to be higher than it actually was
The court noted that labour arbitrators did not need to apply equitable doctrines in the same way as courts did.
Lastly, the court found that the arbitrator’s lack of a discussion about unjust enrichment did not render the award unreasonable. The court pointed out that CPC, which had not raised unjust enrichment before the arbitrator, could not assert this issue for the first time before it.
